Romania’s government has rejected calls to withdraw a decree that critics say marks a major retreat on anti-corruption reforms, standing its ground as huge nationwide protests entered a third day.

As hundreds of thousands of people took to the streets across the country to protest about the decree for the third night running on Thursday, cracks in government unity emerged with the resignation of a cabinet minister and a call from a vice-president of the ruling party for the decree to be rescinded.

Riot police estimated some 80,000 people were gathered in front of the government’s headquarters in Bucharest’s biggest square on Thursday night. Thousands more gathered on the streets of around 20 other cities calling for the government to resign.

Romanian PM to 'press ahead' with corruption decrees as protests grow

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But prime minister Sorin Grindeanu said the government would not repeal the decree, deepening the political crisis.

President Klaus Iohannis announced he would take the decree to the constitutional court, the last legal resort to stop the measured introduced by the ruling centre-left Social Democrats. The party’s leader, Liviu Dragnea, is among those with a corruption conviction.

One protester in Bucharest, Florin Varlan, 42, said on Thursday evening that he would continue to protest after Dragnea “came out today and showed he understood nothing”.

The ordinance decriminalises official misconduct if the funds involved are less than 200,000 lei ($47,800). Critics say the measure helps government allies and other officials facing corruption charges get out of prison or clear their records and claim it will encourage more officials to steal on the job.

Romanians protest against the pardon ordinance adopted by the government in Bucharest. Photograph: Robert Ghement/EPA

Dragnea defended the decree, which did not go through parliament, saying it would not “free corrupt people.” Dragnea also called Iohannis “the moral author” of the sporadic violence that broke out late Wednesday between police and protesters. Dragnea, who has a two-year suspended prison sentence for vote rigging, says he wants a retrial. The conviction bars him from serving as prime minister, which he says is unfair.

In a statement, the US, Germany, Canada, Finland, the Netherlands and France said Romania’s government had undermined “progress on rule of law and the fight against corruption over the past ten years”.

European Commission vice president Frank Timmermans urged the Romanian government on Thursday to “urgently reconsider” the decree, warning that if it was adopted it could affect Romania’s EU funding.

US state department spokesman Mark Toner said Romania’s international credibility and attractiveness for foreign investment were at stake.

“The United States is deeply concerned about the government of Romania’s recent measures that undermine rule of law and weaken accountability for financial and corruption-related crimes,” Toner said.

Even some prominent Social Democrats were upset with the decree.

Business environment minister Florin Jianu announced his resignation. Mihai Chirica, the mayor of Iasi, urged the government to scrap the decree and send another bill on the topic to parliament for debate. He also said justice minister Florin Iordache should resign.

Iordache, who has come under heavy fire for publishing the decree, has temporarily handed his duties over to a subordinate, a spokeswoman said.